Many Lloyds Banking Group plc (LON:LLOY) insiders ditched their stock over the past year, which may be of interest to the company’s shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Lloyds Banking Group
The Last 12 Months Of Insider Transactions At Lloyds Banking Group
Over the last year, we can see that the biggest insider sale was by the insider, Stephen Shelley, for UK£2.1m worth of shares, at about UK£0.52 per share. So what is clear is that an insider saw fit to sell at around the current price of UK£0.48. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
Happily, we note that in the last year insiders paid UK£409k for 862.20k shares. But insiders sold 8.42m shares worth UK£4.3m. Over the last year we saw more insider selling of Lloyds Banking Group shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders At Lloyds Banking Group Have Sold Stock Recently
We’ve seen more insider selling than insider buying at Lloyds Banking Group recently. We note insiders cashed in UK£390k worth of shares. On the other hand we note insiders bought UK£206k worth of shares. Generally this level of net selling might be considered a bit bearish.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Lloyds Banking Group insiders own about UK£19m worth of shares. That equates to 0.06% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Lloyds Banking Group Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Lloyds Banking Group, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. But since Lloyds Banking Group is profitable and growing, we’re not too worried by this. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’re in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Every company has risks, and we’ve spotted 2 warning signs for Lloyds Banking Group (of which 1 is a bit unpleasant!) you should know about.
But note: Lloyds Banking Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
